According to a report today by gaming media outlet GamesRadar, Mark Darrah, a veteran BioWare developer and former producer of *Dragon Age*, believes that the struggling video game industry could learn a thing or two from the business models of the film and television industries.
Mark Darrah first compared the business models of the gaming and film industries. In the film industry, the majority of revenue typically comes from theater ticket sales, followed by extended commercial cycles through derivative markets such as DVD sales, digital downloads, and streaming. Additionally, product placement makes it easier for films to generate profits.
In contrast, the gaming industry’s revenue streams are not as diverse. Aside from free-to-play games, most titles rely solely on microtransactions and DLC to extend their revenue cycles after the initial sale.
Darrah noted a difference between movie subscription platforms and game subscription services. Taking Netflix as an example, the platform typically pays a fixed fee for streaming rights, whereas game subscription services usually share revenue with developers based on player engagement. However, to his knowledge, the industry also has models like Xbox Game Pass (XGP), which feature fixed revenue shares and limited-time releases.
He noted that, purely from a revenue perspective, the approaches of the gaming and film industries are not significantly different. Therefore, the gaming industry should look to the film industry for inspiration, leveraging more product placements to generate additional revenue while also fostering more partnerships.
He continued, “I don’t have a perfect solution right now. But I believe the entire industry should explore new revenue streams; we can’t turn every title into a subscription-based game. The experiences of the past year and a half have, I think, made this point abundantly clear. If we continue down this path toward subscription-based models, all 3A games will cease to exist in the future.”
